While investors and consumers in North America have been busy bashing Research in Motion, customers in emerging markets have been busy buying its products. The Canadian company that was a smartphone innovator and pioneer in the pre-iPhone days released its first good news in months last night, saying that its fiscal second quarter losses were much narrower than Wall Street had forecast. RIM stock surged on news that the company lost just $235 million last quarter on revenue of $2.9 billion.
Sales were off 31% from the year-ago quarter, but up slightly from the previous quarter, giving some investors hope that the worst may be over. And the hand-wringers who have been saying RIM could burn through its cash reserves this year can stop worrying for a while; the company actually socked away $100 million during the last quarter, bringing total cash on the balance sheet to $2.3 billion. Receivables, however, declined by $1 billion.
RIM has been cutting costs by cutting its workforce; the company said earlier this year that it will eliminate a total of 7,000 jobs by the end of 2012. Yesterday it said that 2,000 people have been let go so far.
Research in Motion operates its own secure network, so unlike other smartphone makers it reports subscriber numbers, and those numbers went up during the most recent quarter. Strong demand for BlackBerry phones in India, Africa and other emerging markets helped drive RIM’s subscriber base up from 78 million at the beginning of the summer to 80 million in September.
In India, BlackBerry phones are said to be more highly prized than iPhones, in part because the BlackBerry Messenger service allows users to message one another on RIM’s network. The Indian government tries to preserve network capacity by only allowing mobile users to send five SMS or MMS messages a day, but the BBM messages do not count if they bypass the cellular network.
While success in emerging markets is apparently keeping the company afloat, RIM is determined to return to smooth sailing in North America and Europe as well. Earlier this week, the company previewed its BlackBerry 10 smartphone and operating system, which it plans to launch early next year. RIM hopes BB10 will win back some of the company’s corporate customers with its BlackBerry Balance feature, which allows users to keep two separate, fully encrypted accounts on one device. BlackBerry Balance is meant to appeal to corporate IT managers, who want their employees to keep their personal email and social network activity off the corporate network, and to employees who would also like to keep work and personal life separate.
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